Welcome to Movado Group’s second quarter conference call. (Operator Instructions) I would now like to introduce Suzanne Rosenberg of Movado Group.

With me on the call is Efraim Grinberg, President and Chief Executive Officer, Rick Cote, Chief Operating Officer and Sallie DeMarsilis, Chief Financial Officer. Before we begin I would like to note that this conference call contains forward-looking statements which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors which could cause actual results to be materially different from any future results expressed or implied are discussed in our filings with the SEC. Such forward-looking statements include statements regarding Movado Group’s performance for fiscal 2009 and beyond. We currently expect to update estimates; however the failure to update this information should not be taken as Movado Group’s acceptance of these estimates on a continuing basis. The company may also choose to discontinue presenting future estimates at any time. During the course of today’s conference call management will present certain non-GAAP figures. For a reconciliation of these figures along with information required under SEC Regulation G, please view our earnings press release which has been posted on our website at www.movadogroup.com. Let me now outline the order of speakers and topics for today’s conference cal. Efraim will begin with the highlights of our second quarter, Sallie will then review the financial details, and Rick will provide you with an update on our operating in initiatives along with our financial outlook. We will then be glad to answer any questions you might have. I would now like to turn the call over to Efraim.

Before we discuss our second quarter results, I would like to call your attention to a separate press release we issued this morning which announced that our Chairman will retire at the end of this year and become Chairman Emeritus. In the 47 years since starting our company in 1961 he has been our leader in developing a brand-building reputation with distinctive imaging across a powerful portfolio of brands and geographic markets. Since that time we’ve grown our business from $175,000 in sales to over $500 million in sales last year. Over the course of building our company the Chairman has deeply cared about the employees and shareholders that have supported Movado Group. I have been fortunate to learn the watch business from the ground floor up under the tutelage of a great visionary and business man. As we build on the solid foundation of the mission and the values that he established, we look forward to continuing to grow Movado Group and further strengthening its position as a leading company in the watch industry. Now let me turn to our second quarter results. Given the very strong performance that we are comparing against last year and the further deterioration that has taken place in domestic economy, we are pleased with our performance for the quarter and year-to-date period. In addition, the decisive actions we’ve taken to reduce our expenses and improve productivity will strongly position our company to capitalize in the future growth prospects that much more quickly as the economy recovers. Our expense reduction program is expected to generate $25 million in annualized cost savings and is designed to accelerate our ability to achieve our mid-teen operating margin target. We continue to manage through the strong macroeconomic headwinds in the US which has been somewhat offset by the…

Sales for the second quarter were $129.7 million or 7% below prior year. Net sales for last year included $8.3 million of excess discontinued inventory. Excluding the sales of discontinued products, net sales decline by 1.1%. Sales were favorably impacted by the effect of foreign currency. On a constant exchange rate basis sales decreased by 6.2%. The balance of my remarks as they relate to sales will exclude the excess discontinued product sales recorded last year. Sales in the wholesale segment decreased by $1.4 million or 1.3% to $107 million. The net decrease was the result of lower sales in the luxury and accessible luxury categories somewhat offset by growth in our licensed brand category. The luxury category was below last year by $700,000 or 3.3%. The accessible luxury category was below prior year by $9.3 million or 18.2%. The decline in the accessible luxury category is primarily in the US where the retail environment has been challenging. Our retail partners are managing their inventories and placing their orders closer to the selling season which will likely shift purchases from the first half of the year to the second. Additionally, we have reduced the number of doors in connection with our Movado brand strategy. All licensed brands were above prior year with growth in both the US and the international markets. As a category licensed brands grew 28.5% from last year. The US wholesale business was below prior year by 13.7% and the international wholesale segment was above prior year by 11.8% Net sales in the retail segment were $22.7 million or flat to last year. As of July 31 the company operated 29 Movado boutiques and 31 outlet stores. Gross margin was 64.7%. Excluding the liquidation of discontinued product last year gross margin in the year ago period was…

To lay a strong foundation for future growth we continue to take important actions to improve efficiency and effectiveness to our organization. As previously announced our expense reduction plan is expected to generate $25 million in annualized cost savings. This action together with continued gross margin improvement will position us to achieve our mid-teen operation margin objective on a more accelerated basis. I will provide some more details on our outlook later in my comments. Importantly, our balance sheet remains strong and we will continue to leverage our solid financial flexibility to invest in the future growth of our business. As you know we have been focused on three key operating initiatives for fiscal 2009. Our expense reduction plan is now a fourth key initiative that we are focused on implementing over the remainder of this year. I would like to take a moment to review these four initiatives and the progress we are making on each. First, we are executing our Movado brand strategy across our wholesale and retail channels. We have been working closely with our retail partners and have completed the closing of 1,400 wholesale doors. These door closings obviously impacted the sales of Movado during the first half of the year. Nonetheless we are already seeing productivity per door improving and we would expect this to continue over the near term and beyond. Our actions have received a very positive response from our retail partners particularly as we head into the important holiday selling season. Second, we are focused on maximizing growth opportunities in our existing businesses particularly in our licensed brand portfolio. During the quarter licensed brands continued to fuel our overall sales growth. We would expect this to continue throughout fiscal 2009 not only as these brands increase in scale but also because their…

(Operator Instructions) Our first question comes from Jeff Blaeser - Morgan Joseph & Co., Inc. Jeff Blaeser - Morgan Joseph & Co., Inc.: Can you give us an idea of the timing of the cost reductions second half of this year and next year in terms of like $6 million per quarter, percent of sales? And then are there going to be any other impacts to the business? Does this allow you to increase R&D, advertising or is it as simple as taking $25 million out of our expectations next year?

I think from a standpoint of its $25 million on full year impact. Obviously the payroll related expenses which are about half of the cost certainly would be pro rata each and every quarter. The other expenses would not quite be pro rate each and every quarter because some of those expenses are booked as a percentage of sales and things of that nature. But I think if you use it as a general guideline that pretty much pro rate per quarter that’s probably a safe bet. Number one. Number two is for this year the $6 million will basically be incurred and we will disclose at each of the quarters. Again I think payroll, most of it this year will be certainly some in the third quarter but more in the fourth quarter so a bit more of a 60/40 type of split that may be the case. But again we will disclose that during the rest of the quarter. Clearly from a company, it does give us the opportunity to invest as we have in the past including we would expect that this would drop from a standpoint of reducing our expenses, there are other expenses that we will incur. We talked about those in my comments but this certainly does give us the opportunity of further investing as we need to and obviously taking sales growth to invest. I think the best measurement is one I’ve outlined that next year we would expect to have our operating profit basically in the arena of 15% range and that’s probably the best guidance of how to look for next year. Jeff Blaeser - Morgan Joseph & Co., Inc.: For the cost reduction plan, is this part of the longer term plan from the beginning? Because I remember I think the old plan was to get to 15% on a longer basis. Now would this expand your long term EBIT margin goals as an additive to that?

I think the first thing to deal with is yes, this is on an accelerated timing. As you know we talked about achieving 15% over the next handful of years and we said the second part of that plan would be more driven by expense management. Clearly we’ve accelerated that but let’s focus in on the first piece. And like I said next year we’ll be in the arena of the 15%. Our goal is over the next couple of years to get to that level and then obviously achieve that and then we’ll clearly talk about our next level of goals.

I’d like to add to Rick’s comments, and I think we’ve highlighted it in our earlier press release and then as well as Rick’s comments, that we took the impotence of a more challenging economic environment to accelerate our cost reduction efforts. So it certainly we believe will accelerate our performance going forward.

Our next question comes from Kristine Koerber - JMP Securities.

As far as the shortened lead time by retailers, what are we talking as far as how close they’re buying to need and does this shift more sales into the fourth quarter?

I think it’s a little too early to tell that whether it shifts sales into the fourth quarter, but we believe certainly and we know at the retailers are obviously watching their inventory levels very closely and are trying to manage on a closer and more just-in-time operating basis. But obviously they have to begin taking in inventory for the holiday season within the third quarter as well as the fourth quarter which is normal for us. Certainly it’s a well-known fact that retailers are trying to take the inventory closer to the actual selling time rather than in advance.

Looking at international trends, it sounds like your business is good internationally despite the macro slowdown. I’m just trying to clarify. Have you seen any changes internationally from the last quarter?

On the licensed brand side we have certainly seen the economic environment has changed but our sell-through has continued to be strong. But you are seeing some slowdowns economically in markets like the UK and like Spain. But we continue to increase market share in both of those markets and we continue to remain very strong in our international market place.

Our next question comes from Jody Kane - Sidoti & Company. Jody Kane - Sidoti & Company: Just on the market share of the Movado brand, is there a way to quantify or to talk a little bit about the strength of the Movado brand and how it’s doing in light of the change that you made?

In July which is the first month really where we’ve seen our door closures take hold and really be completed, we have seen increased productivity at our points of sale taken as a whole. Movado has a significant market share in this market place of watches priced between $500 and $1,500 and it has maintained and grown that market share in most cases. Very strong in the department store channel and extremely strong in the chain jewelry channel as well. Jody Kane - Sidoti & Company: Are there any new products coming along the Movado line? And how much of an impact is that going to help to offsetting door closures and moving into the new doors, and how well are people interested in these new Movado products?

There’s certainly a significant amount of new products coming this fall and even a greater level next year. Product innovation is one of the things that continues to drive the Movado brand and it certainly becomes even more important in more challenging economic times. So we are very focused on product innovation and continuing to innovate along the product lines. I mentioned several of the new products that are being introduced for this fall as well as our focus on product segmentation as part of the unified branding strategy for the Movado brand. So we’re introducing both more accessible price points for our distribution that deals with the more price point minded consumer as well as more luxurious price points for the Chinese market place as well as our boutiques and our higher end distribution. I think that’s one of the very positive things that came out of our very in-depth analysis and to our unified brand strategy both for our boutiques and our wholesale business for the Movado brand. We’re also working for next year on some exciting products in Series 800 at more accessible price points as well. Jody Kane - Sidoti & Company: So we’re looking at less doors, better productivity and more product introductions or a wider assortment of products now than ever before?

I think that you just summarized the message very clearly. Jody Kane - Sidoti & Company: And finally, on the Chinese market. How many quarters have you been in there or have you been expanding into China? How much more is there to expand into?

We started in China about three years ago. We have been working with a distributor in the market place. I think we announced earlier this year that this year would be a transition year for us in China. We’ve had our own operation but next year we will become the official importer of our watches into China which will give us a greater direct control over the market place as well as a great opportunity to really accelerate the growth of our brand in China. And this is really the culmination of a several-year effort in that direction.

Our next question comes from [David Peterno - David Peterno Company]. [David Peterno - David Peterno Company]: Before I ask my question I’d like to congratulate Gerry if he’s on the line on your retirement. It’s been a long and very profitable association for me.

I will communicate that message to him. Thank you David. [David Peterno - David Peterno Company]: He’s not listening?

I’m sure he’s listening. [David Peterno - David Peterno Company]: My question revolves around the cost savings program. You touched on it Efraim in the answer to somebody else’s question. You’ve been talking about reducing overhead as a percent of sales for a long time. Five, six, seven years, something like that. So now you’ve bitten the bullet and instead of taking a multi-year plan, you’ve done it all bang in one bunch. And I think that’s fine but why now?

I think that as I said earlier we took the impotence of a more challenging economic environment and at a time when it becomes more challenging to accelerate your top line to say that if our top line is not going to accelerate as quickly as we would like and cover and reduce our overhead as a percentage of sales, then we had to take an aggressive action to do that. And that’s why we decided to do that. We believe it’s the right thing for both the short term and the long term. We’ve flattened our organizational structure so we’ll have less layers of reporting and we’ve taken some decisions that we now have the capability to do. For example we now have a duty-free operation in our distribution center in New Jersey so we’re able to consolidate our Canadian operations into New Jersey from a distribution and an accounts receivable point of view. And that will promote a significant amount of cost savings. We just felt that we weren’t going to be able to grow our way into a lower percent sales although we still obviously plan on continuing to grow the business and we are, but to get to the right level or a more efficient level we had to take a severe, aggressive direction in terms of our expense management and expense control. [David Peterno - David Peterno Company]: I applaud the action. Part B of this question. What’s the appropriate tax rate for those of us outside the company in their models to use on this $25 million? I believe it’s largely domestic rather than international so I suspect that the tax rate is a higher number than the 24% or 25% number the company’s using overall. Is that correct?

Yes, and if you look at the numbers, if you look at the $9 million and $6 million and then you translate that to the I believe it’s the $0.24 and the $0.16 we’ve outlined in there, you’ll basically see that that’s a tax rate in the 30% to 32% arena because you’re right. When you’re done, that is a blended rate from a standpoint of North America as well as European. They are different tax rates. So it is higher than the company average of 24% and again more in that 30% to 32%. That’s why I tried to give you the impact on EPS standpoint so that you could calculate that.

Our next question comes from [William Witcher] - Private Investor. [William Witcher] - Private Investor: Efraim, I’d also like to echo what David said and pay tribute to your dad. I haven’t been a shareholder quite as long as David but have certainly been around for the formidable years and I understand the struggles and challenges and how far you’ve come. So I wish your dad very well in his retirement.

Thank you very much Bill. [William Witcher] - Private Investor: It seems to me you’ve really struggled over the years with the boutiques and now you’ve put in someone new to head that whole division. What are your goals for that division in terms of profitability, in terms of stores? I’m sure there’s been some redefinition with a new chief in that operation.

Basically we believe that the boutiques are vital to the overall strength of the Movado brand. We’ve done a tremendous amount of research on that and it’s actually been proven that the Movado performed significantly better to our competitors and has a larger market share in markets where we have boutiques. But we do want them to be profitable and we are very focused on making that a profitable venture. It is obviously too early with a new head of the boutiques on board but we are optimistic that with our strategy that we just really implemented at the very beginning of this year, we are headed in the right direction of focusing on product segmentation, focusing on watches, and reinvigorating our jewelry design. But we will really see that all take hold next year. I have to remind you that the boutiques are profitable on a four-wall basis and it’s really the investment that we make on the marketing front as well as the general overhead that we apply to the boutiques. But we do believe that they are a vital and important part of the future of the Movado brand especially with a more limited distribution in our wholesale business. I think that if the economy turns around as well as our strategy takes hold, we’re going to see a greater improvement in that area. [William Witcher] - Private Investor: Can you give us some tangible evidence in your thinking that foreign sales may actually come through in the second half to balance out what we’ve seen as reductions in the first half or is it just sort of a hope that these things will come through, especially with the UK and Spain being [inaudible]?

We have a highly diversified international market, and again you’ve got to remember that we have nine brands. We don’t really on the international side have any major markets like the United States for example. So it’s diversified throughout Europe; it’s diversified throughout the Middle East which is one of our strongest markets; Latin America, Caribbean, Canada, as well as Asia. Are we expecting to see some slowdowns in certain markets? Yes. That is built into our expectations. I also have to tell you that on the domestic front we believe that as you look at the fourth quarter of this coming year we’re obviously comparing ourselves to a weaker fourth quarter last year. The first half of last year was extremely strong. So we think there are opportunities domestically as well in the second half of the year. So I wouldn’t just count on the international side of the business. I think we have to have a well balanced approach to our business we generally have had. We’ve always had a diversified business model from a branding point of view and I think the thing that’s happened over the last year is it’s become even more diversified on a geographic point of view and I think that’s been very good for the company.

Our final question comes from Kristine Koerber - JMP Securities.

Regarding your Movado brand and bringing down the price points, how do you manage that without tarnishing the long-term image and will it have any impact on ESQ?

I want to clarify something. We’re not bringing down the price points. What we’re doing is bringing new product innovation to some of the entry level price points of the Movado brand. So the Movado brand has had women’s watches for example like the Harmony at $395, $495, $595 and all we’re doing is making sure that we’re able to segment the distribution for those products properly and then continue to innovate in those product categories. So as I said earlier, Movado it’s sweet spot is $500 to $1,500. That doesn’t mean that we won’t have several watches at $395 and $495, which I guess is $500, as well as watches between $1,500 and $5,000 that maintain the prestige and image of the brand. The boutiques also do a significant effort in enhancing and continuing to build upon the Movado brand image with better product and higher end product. On the ESQ side I think one of the things that you also see is that we are expanding again our price points a little bit at the lower end of that spectrum, $295 and $250, and just slightly again with new innovation and very successfully as well.

That concludes our question and answer session for today. I’ll now turn the call over to management for any closing comments they may have.

I would like to thank all of you for participating today. We remain focused on what we have to do in the current operating environment but we also remain focused on the long term, ensuring that our brands remain strong and that we continue to invest behind new product introductions, innovation and compelling marketing programs. I’d like to thank all of you for your support and thank you for participating today.